Wednesday, March 22, 2006

English Championship may beat clubs to China

English Premier League club Chelsea may be approaching the Chinese market through the Asian Football Confederation's Vision China program but the English Football League, responsible for administrating the lower three divisions of the English competition, could become the first foreign league to enter a formal partnership with Chinese football administrators.

According to Nick Harris of The Independent (UK) the Football League was first approached last year by a Chinese provincial government wanting to tap into the "authentic" football offered by the League in England below 'premiership' level. Exhibition matches, education programmes, academy partnerships and merchandise deals are some of the areas where China and the League might combine forces.

Sources stressed to Harris that talks are in their infancy, with a lot of fact-finding still required on both sides. "But senior officials from the province, the identity of which is being kept under wraps, have visited England for discussions. They also attended the Carling Cup final last month as guests of the League," Harris disclosed. "A League delegation, headed by its chairman Lord Brian Mawhinney, will travel to China this summer to explore possibilities with the province in question. Mawhinney has an open mind on what a tie-up might involve but is interested only in 'significant and long-term' developments."

Foreign clubs have had mixed success in sustaining income from fans in the Peoples Republic of China, Harris further explained. Ever since West Bromwich Albion visited in 1978 most marketing planning, if any, has been focused on brand and kit licensing and off-season tours. Now relationship-building is seen to be imperative.

Real Madrid signed a co-operation agreement with China Super League club Beijing Hyundai in November last year and English Championship club Sheffield United recently became the first foreign club to buy a Chinese side, when they purchased Chengdu. However, Newcastle United's earlier tie-up with Dalian Shide and Scotish Premier League club Glasgow Rangers' with Shenzhen are already dormant.

"It's been a dash for cash but with little strategic thought," said Dr Simon Chadwick, the co-director of the Birkbeck Sport Business Centre, which has conducted research in China on the subject, including during Manchester United's tour last summer. "Teams have landed in China thinking, 'There's pots of cash to be made here', and then not found it. Outside the hot spots like Beijing, Shanghai, Shenzhen, it's still a fairly agrarian society. A lot of people have low or no disposable income and even in the hot spots there's massive competition for that income."

"British clubs should have benefited from first-mover advantage," Dan Fletcher, a director of FMM International, commented, "but some lost interest very quickly when they realised there weren't going to be huge shirt sales."

Chinese fickleness is, apparantly, a sales issue. "In China, it's quite normal to follow Bayern Munich, Barcelona and Manchester United equally," Richard Li, FMM's man in Beijing told Harris. "It's hard to comprehend for English clubs that your allegiance can be spread, but it's often the case. It makes it all the more difficult to turn 'support' into money." It's harder still when fake merchandise can be bought for a pittance. One sample price for four full kits (Man Utd home and away, Chelsea home, Real home) was £20 combined - before the bartering began. With a bit of haggling, a shirt alone, albeit not of superior quality, can be yours for £1.50.

"So making a killing on merchandise is currently a myth, as is the idea that English football is No 1 here or that English clubs are on the verge of an internet-led windfall. Serie A and the Bundesliga vie for TV ratings supremacy, with matches averaging between 13 million and 15 million. The Premiership is not far behind, with Spain's La Liga trailing, hindered by evening kick-offs in Europe (the middle of the night here)," Harris opined, adding that local sources also point to European clubs' struggling Chinese-language websites as evidence that there is little will to pay for content, with or without live action.

"Manchester United, in common with Arsenal, Liverpool, Bayern Munich, Roma, PSV, Juventus and others, have been paid a flat fee by a website provider to allow that provider to run their Chinese site. United will earn an estimated £300,000-£400,000 over three years. The theory is that the provider will profit from subscriptions but even as internet use expands - 130 million Chinese now use it - this is not happening. United's site was launched last year amid claims that they have 20 million Chinese fans and 94 million globally. That is actually a "name recognition" stat, not an allegiance as western football knows it. Local sources say providers doubt they will recoup their outlay," he observed.

"Western clubs can make some money from one-off tours, exclusive signed merchandise and possibly through franchising academies - but not, it seems, from restaurants, with all but one of Manchester United's 'red caf├ęs' now shut down ...However, a liberalisation of the gambling laws could change everything in a country that spent an estimated £3.5 billion in illegal online wagers last year and no doubt Manchester United's potential shirt sponsor, the Gibraltar-based gambling site Mansion, has noted the potential."


See also: Asian-backed Mansion tipped to be ManU sponsor (4 March) and Chelsea for partnering not exploiting Asian football (2 March) and Ladbrokes targets Asia for sports betting expansion (26 Feb) and Poll: Italian clubs still "most famous" in China (6 Feb) and English Championship club acquires Chinese club (13 Dec) and Real Madrid and Beijing Guo'an sign co-operation (10 Nov).

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